Good morning, everyone, and welcome to the Shenandoah Telecommunications Fourth Quarter and Year End 2015 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Ms. Adele Skolits, CFO. Please go ahead..

Good morning and thank you for joining us. The purpose of today's call is to review Shentel's results for the quarter ended December 31, 2015. Our results were announced in a press release distributed this morning, and the presentation we'll be reviewing is included on the Investor page of our Web site at www.shentel.com.

Please note that an audio replay of the call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Christopher French, our President and Chief Executive Officer; and Earle MacKenzie, our Executive Vice President and Chief Operating Officer.

After our prepared remarks, we'll conduct a question-and-answer session. As always, let me refer you to Slide 2 of the presentation, which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties.

These may cause our actual results to differ materially from these statements. Shentel provides a detailed discussion of various risk factors in our SEC filings, which you're strongly encouraged to review. You're cautioned not to place undue reliance on these forward-looking statements.

Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. Also, in an effort to provide useful information to investors, we note on Slide 3 that our comments today include non-GAAP financial measures.

Details on these measures, including why we use them and reconciliations to the most comparable GAAP measures, are included in our SEC filings. These reconciliations are also provided in an appendix to today's slide presentation. I'll turn the call over to Chris now..

Thank you, Adele. We appreciate everyone joining us this morning. We had a strong fourth quarter capping off a great year and I'm pleased to have this opportunity to provide details about the Company's continued growth. During the quarter and the year, we delivered an expanded customer base, revenue growth and improved margins.

In addition, the team delivered these results while also positioning the Company to scale dramatically through our pending acquisition of nTelos. On Slide 5, you'll see that fourth quarter 2015 net income increased 40% to 12.1 million compared to the prior year. All three segments contributed to this improvement.

For the quarter adjusted operating income before depreciation and amortization or OIBDA increased 17.5% to 40.1 million. Revenues were 87.3 million in the fourth quarter, a 5.4% increase from the prior year period. Revenues increased chiefly as a result of subscriber growth and improved product mix.

Our cable segment revenues improved as a result of an increase in the number of revenue generating units or RGUs and higher average revenue per customer due to video rate increases and customers increasingly selecting high-speed data packages.

On an annual basis as you see on Slide 6m consolidated 2015 revenue grew 4.8% to 342.5 million and adjusted OIBDA increased 14.2% to 150.9 million for the year. Slide 7 illustrates the 19.7% growth in operating income to 74.1 million and a 20.6% increase in net income to 40.9 million for 2015.

Our Wireless highlights start on Slide 8, we experienced solid growth in our Wireless segment with an 8.6% increase in customers for our postpaid offering as result of our upgraded network leveraging Sprint’s national marketing and providing high-quality local customer service.

We saw a slight decline of 1.6% in our smaller prepaid customer base, but saw net prepaid service revenue increase 8.4% due primarily to improved product mix. Wireless operating income grew 7.4% as compared to 2014.

Turning to Slide 9, our cable segment also delivered outstanding growth in the quarter as demand for our high-speed Internet and voice services, outpaced the anticipated decrease in video subscribers. Operating revenues increased 15.8% to 25.7 million while cable adjusted OIBDA grew 19.4% to 8.2 million.

Customer demand for higher bandwidth data services and growth in RGUs of 3.6% drove the revenue and OIBDA increases.

As many of you know, we have diverse revenue streams and Slide 10 profiles two additional assets, our fiber leased revenues increased more than 17% to 9.8 million [Multiple Speakers] and our 158 towers generated 1.8 million in OIBDA from leased revenue, up slightly compared to last year's fourth quarter.

Our continued success has enabled us to consistently pay dividends since 1960, as you can see on Slide 11. In December 2015, we continue that commitment paying a dividend of $0.48 per share or $0.24 per share after giving effect to the two-for-one stock split to shareholders of record December 31, 2015.

This was a strong quarter for our Company capping a great year. We are pleased to have delivered continued organic revenue growth and enhanced profitability. Our upgraded Wireless and Cable networks [Technical Difficulty] attracting new customers and growing our customer base.

We're especially pleased to have achieved record growth in postpaid additions in our Wireless business this quarter. As customers continue to expect more from the Cable and Wireless providers, our enhanced service capabilities and product offerings position us well to become the carrier of choice in the markets in which we operate.

Our balance sheet remains solid, providing a platform for our continued growth and we look forward to closing the nTelos acquisition and expanding our operations to include additional customers in new markets. I'll now turn the call back to Adele to review the details of our financial results..

Thank you, Chris. I’ll begin on Slide 13 which shows our growth and profitability. In the top-line, you can see that we had nearly a $5.4 million or 33% increase in operating income for 4Q15 over 4Q14, over the same period net income is up 40% and earnings per share is up 33%.

Turning to Slide 14 for the year ended December 31, 2015, operating income was up $12.1 million or 19.6% over 2014. As you can see 4Q15 adjusted OIBDA is up nearly $6 million over 4Q14 or 17.5%. For the year ended December 31, 2015, adjusted OIBDA is up $18.8 million or 14.2%.

These improvements are consistent with longer term trends as you can see on Slide 15 while it's provided the long-term view of adjusted OIBDA, since 2010 adjusted OIBDA has grown by $66.9 million, this represents a compound annual growth rate of 12.4%.

To better understand the forces driving results in all three of our segments, I've provided the fourth quarter OIBDA results by segment on Slide 16. Adjusted Wireless OIBDA has increased by $900,000 or 4% while Cable results have improved by $3.9 million or 90%. Wireless results have increased by $1.8 million or by 28%.

On Slide 17, I've analyzed the changes in adjusted Wireless OIBDA results between 4Q14 and 4Q15, the cost for a prepaid customer acquisition and support cost have dropped by $1.4 million between 4Q14 and 4Q15, this as a result of a 9.8% drop in the number of prepaid gross additions and a drop in the rate Sprint charges to Shentel to support these customers.

As a result of the growth in the average billing rate per prepaid customer of 7.3%, prepaid revenues grew by $900,000. This growth is driven by a shift in the mix of customers to the Boost brand which carries a higher billing rate than the Virgin Mobile and Assurance brands.

The shift from subsidized to financed and leased handsets which began in late 2014 grew over $400,000 drop in post-paid handset and other acquisition costs. The cost to support the network grew by $700,000 as a result of increases in cell site rent and backhaul, coupled with decreases in capitalized labor.

Post-paid revenue is down $1.1 million as a result of lower billing rates associated with rate plans offered to customers to finance or lease their phones, as well as promotional discounts Sprint is offering. On Slide 18, I've shown the components of changes to adjusted Cable segment OIBDA.

The positive changes include significant growth in high speed data revenues of $2.1 million, as a result of an 8.2% increasing in average high speed data or HSD customers. Also, the HSD customers are choosing higher speeds that carry higher service charges.

Voice equipment and other revenues grew by $800,000 as a result of the growth in customers and charging separately for equipments that had been included in service fees in 2014. Video revenues were up $600,000, as the slight loss of video customers was offset by increases in video rates driven by higher programming costs.

Programming costs grew by $600,000 as well, so at the end of the day we are passing along these cost increases to our customers to maintain our margin on video services. Selling, general and administrative costs have dropped by $500,000 as a result of decreases in marketing bad debt and customer care expenses.

Finally network costs have dropped as a result of reductions in the cost to maintain the network. On Slide 19, we've analyzed the changes in Wireless results between 4Q15 and 4Q 14, facility leased and enterprise revenues have grown by $1.3 million as a result of increased fiber sales within our other revenue.

We're also spending $600,000 more in cost of goods sold to provide these increased fiber services. Access revenues increased by $700,000, these fees are higher as a result of having recorded an unfavourable adjustment to revenues in 4Q14.

Other revenues have grown by $400,000 as a result of the increased billing to Shenandoah County data customers related to their demand for higher speed data services. At this time I'll turn the call over to Earl to go into greater depths on some of the operating factors driving our results..

Thank you, Adele and good morning everyone. I'll pick up on Slide 21, we ended the year with 312,512 post-paid customers an increase of 24,645 in the past 12 months. We ended 2015 with 455,352 total customers. We continue to see an increase of smartphone penetration with 82% of our post-paid users having a smartphone at year-end.

95% of the smartphones are LTE capable with 75% also having 2.5 gigahertz enhanced our LTE capabilities. Slide 22 shows are exceptional post-paid fourth quarter. We added 8,985 post-paid users, an increase of 84% from last year.

We had 1,277 more gross adds primarily the reason for the higher net adds with churn at 1.48% compared to 1.92% in the fourth quarter of 2014. Our 2015 churn rate is lowest in our history.

We continue to have a very favourable porting ratio compared to all carriers with the overall porting ratio of 2.5 to 1 with a majority being prime credit class customers. The percentage of sales coming through our stores are comparable year-to-year.

The strong fourth quarter results are a combination of a very good network and a strong local distribution strategy.

Let me add a few more stats, phones represented 87% of our fourth quarter net adds with the remainder being tablets and connected devices, we continue to focus on the quality of net adds with a focus on adding higher service revenue phones rather than much lower service revenue tablets.

25% of gross adds were on subsidized plan, 54% on lease and 21% were installment sales. Fourth quarter upgrades were 10.6% of our base, with 33% selecting subsidized plan, 51% lease and the remaining 15% installment sales. As of December 31st, 55% of our base remains on subsidized plans.

The enhanced pass off promotion started November 18th approximately 15% of our fourth quarter adds took some version of that plan. With almost 90% coming from AT&T and Verizon, remember we only compete against T-Mobile in the Eastern part of Pennsylvania.

As we've seen over the past several quarters our gross build revenue per post-paid user continues to decline as we continue to have more of our base on non-subsidized phone plans.

On Slide 23, you see in Q4 the average was $56.49, a decrease of $6.25 in the past 12 months, but was only down $0.90 from the third quarter of 2015 although decreasing the rate has slowed and we are still at the higher end of the industry.

As we stated previously both the revenue and cost of goods sold related to leased and installment phone sales are recorded on Sprint's book not Shentel.

Although average post-paid billed revenue per user was done 10% in the past year due to strong post-paid adds of primarily higher ARPU phones, Slide 24 shows that our fourth quarter 2015 total gross billed service revenues is down only 3% at 52.1 million, we saw a decrease in the amount of bad debt, but an increase in discounting credits resulting in net post-paid service revenues of 35.8, also a 3% decrease from 2014.

Shifting to prepaid on Slide 25, we continue the pattern of losing low-quality Virgin Mobile and Assurance customers with very strong net adds in Boost customers. We have a dedicated prepaid staff that works to actively assist third-parties to open standalone Boost stores in our service area.

We lost 2,264 net prepaid customers in the quarter to end the year at 142,840 prepaid users. 78% of our prepaid users have a smartphone with 82% of the prepaid smartphones having LTE capabilities. Reflected on Slide 26, prepaid churn remains high, driven primarily by the loss of Virgin Mobile and Assurance customers.

You see the impact of this shift in the prepaid mix towards Boost in the overall $2 increase in the prepaid gross build revenue in the past 12 months. The results have been fewer prepaid customers but higher prepaid margins and operating income.

Network stats are shown on Slide 27, we have 552 cell sites 93% have a second LTE carrier at 800, 34% have three LTE carriers with two at 1900 megahertz and one at 800 megahertz. We have started launching 2.5 gigahertz sites late in 2015.

To-date, we have 16 online, we would have more but the delay in turning down the Sprint WiMAX network and the need to finalize the spectrum lease has delayed our rollout. We plan to have approximately 45 2.5 sites completed by the end of the first quarter and all 125 of our planned 2.5 sites on the air by the end of 2016. 91% of our data is on LTE.

The volume of data grew 13% in the fourth quarter and 65% in the past 12 months. Our average speed is approximately 4 megabit, but that doesn’t reflect the impact of the 2.5 spectrum. At the limited 2.5 sites in service, we are seeing typical speeds between 10 and 40 megabits.

Once we have deployed all of the 2.5 sites, we expect our average speed to be significantly higher. We continue to have very low dropped and blocked calls. We also continue to build fiber to cell sites. Currently, we have our fiber build to 217 cell sites, a 174 of our sites and 43 of others. We plan to add an additional 50 sites in 2016.

We are very pleased with the significant improvement in our Cable results previously outlined by Adele. Show on Slide 28, we added 889 RGUs in the fourth quarter and 4,355 in 2015. We continue to see a loss of low margin video RGUs at 624 in Q4, many of which were video-only customers.

As has been our practice over the past few years, we increased video prices to our customers in January 2016, to pass on dollar for dollar the increase from the programmers and broadcasters. In Q4, we added 1,070 high-speed Internet RGUs and 443 digital phone RGUs.

As we've discussed in previous calls because we own the middle mile and telephone switch, the margin on incremental broadband and phone RGUs are very attractive. Excluded from our Cable stats are the 5,000 RGUs we obtained as of January 1st from the purchase of Colane Cable. We made the decision to drop the AMC channels as of December 31st.

AMC wanted significant rate increases over a very long contract that also required Shentel to move all of the AMC channels to the most-watched tier. In addition to having passed a pass on price increases to our customers, the channel placed that we had limited our ability to continue to grow broadband.

To-date, we've lost about 200 video customers out of 50,000 virtually all that were multiservice customers continued to purchase the higher-margin broadband and phone services from Shentel. Slide 29 shows the continued trend of higher ARPU per RGU and per customer.

Average revenue is up $12.36 per customer since the fourth quarter 2014 and up almost $3 in each of the past quarter. The quarter-over-quarter increase is driven by the increase in broadband ARPU.

The significant improvement in Cable results is primarily due to speed upgrades of our broadband customers and a collection of allowances generating over $61 per month in broadband ARPU.

Slide 30, is a three comparison of year-end Cable RGUs, this slide highlights the trends that I've just already discussed, in the past two years we've added almost 10,000 broadband RGUs and approximately 5,200 voice RGUs and lost 2,900 lower margin video RGUs. We've added approximately 3,200 customers.

Our primary focus has been to make each customer more profitable. I'll now move to our Wireline segment on Slide 31, you see an uncharacteristically large loss of access lines in 2015. As I previewed in our last earnings call, as of October 01, 2015 we no longer require our regulated phone customers to have a phone line in order to have broadband.

We also launched broadband speeds of 15 megabits to 101 megabits on a Cable network, which overlaps approximately two-thirds of the homes passed in our regulated phone service area.

Of the total 1,313 access line losses in the fourth quarter 1,172 customers dropped their phone line but kept their broadband, because they gave up the bundled discount these 1,172 customers are paying more for their broadband service offsetting part of the loss of regulated phone revenues.

I've shared some details of our fiber sales on Slide 32, you see that affiliated and non-affiliated fiber revenues grew almost 10%. We signed $22 million of new fiber contracts in 2015 with 10 million in the Cable footprint.

We've recently finished a new cable, our new fiber route in Southern Pennsylvania and we're excited about the opportunities to build fiber to ours and other cell sites and expand enterprise sales.

Finally Slide 33, details our actual CapEx spend for 2015 and plan for 2016, the 2016 capital plan includes 123.3 million that we now plan to spend in the nTelos service area as we finished the LTE upgrade and 50 new coverage sites.

Omitting the 123 million for nTelos, the remaining CapEx plan is 95.1 million, an increase over our previous two years due to approximately 36 million of non-nTelos expenditures for network expansion.

The major projects for the upgrade of the Colane Cable, a fiber build along Interstate 81 in Virginia from Harrisonburg to Rhodo and plans to continue to build fiber to the towers. Let me conclude by giving you an update on nTelos, overall we are very pleased with our progress and excited to get started.

We have received all government approvals necessary except for the FCC. That process is ongoing and we're consciously optimistic that approval will be forthcoming in March. As we reported the bank facility to finance the purchase repaid the nTelos debt and refinanced our debt has been finalized.

The integration planning with the nTelos management has gone smoothly and we've made offers to approximately 300 employees for permanent position and another 200 employees will join Shentel for varying lengths of time to assist in the transition.

We have everything staged to convert the nTelos stores to Sprint format as quickly as possible after the close. But we will be selling Sprint service upon closing. nTelos has continued to make progress in upgrading sites to LTE.

Our teams have been working together and this should be a smooth hand off as we continue the upgrades using Network Vision architecture and go back and add 800 megahertz LTE carriers to all previously completed LTE sites. We started the search in engineering for the 150 to 200 new coverage sites that we plan to build over the next three years.

There have been some smooth changes in our integration plan since we made the announcement in august.

During our pre signing discussion with Sprint a material assumption made by all parties that we would be able to migrate the nTelos customers over in mass within 90 days after closing the merger and the updates for the nTelos phones will be supported by the Sprint back-office.

Recently it’s become evident that that plan will not work, we will need to get a different device in the hands of the majority of the nTelos customers which will increase the cost of the migration process.

For any iPhone user with an iPhone 5C or newer we can upgrade their phone by inserting a new SIM card, that represents over one-third of the nTelos customers. We'll need to provide either a new or reconditioned phone to all other nTelos subscribers.

The nTelos' android phones and older iPhones are incapable of being managed by the Sprint billing system because Sprint and nTelos use a different over the air technologies to manage the phones.

Let me be clear, during the migration the nTelos customers will be able to continue to use their phones and will have at least the level of service they have today. One improvement upon closing will be updating all the nTelos phones to allow them to roam on the Sprint LTE network.

We still plan to move all customers over at the same price plan unless the customer requests the change. This will lead to touch each customer and our goal is to minimize churn. We now estimate that the customer migration could run through the end of 2017.

This will require additional staffing for retail store locations and the call center that we didn't previously expect.

Although the customer migration will be extended, we believe that the change has a positive aspect and that we will have the opportunity to talk to each customer and make sure they understand all the upgrades planned and evaluate their current usage patterns to get them on into an optimal service plan.

We are continuing to do the planning on the transition but since we have to maintain the nTelos network, provide additional customer care and replace various customers’ devices. We estimate that the total onetime cost that we will incur in 2016 and ’17 could be up to twice the 80 million and we had previously estimated at our announcement in August.

But we're still looking for ways to minimize the total cost. We have adequate capacity in our debt facility to cover these one-time costs and are talking to Sprint about ways to mitigate the total impact.

During the migration, we're not paying the 8.6 net service fees to Sprint on the non-migrated customers and you may recall that Sprint has already waived the 8% management fee for more than five years as an incentive for Shentel to purchase nTelos.

Although the migration process will be different from what we initially expected, management is still extremely excited about the deal and the transaction still provides significant upside to our shareholders.

These additional cost of one-time expenses and we're focused on minimizing these additional costs and churn to keep as many nTelos customers as possible at the least total cost. Once the migration is complete, we believe that we will be in a position to realize the great economies of scale our current contract with Sprint provides.

We plan to harness the momentum that we have coming out of 2015 to accelerate the upgrades of the nTelos network, migrate the nTelos customers and integrate the nTelos employees into the Shentel team. I'll now turn the call back to Adele..

This concludes our prepared remarks. Tyron would now review the instructions for posing a question..

Absolutely. [Operator Instructions] Our first question is from Ric Prentiss of Raymond James. Your line is open..

A couple of questions, first I appreciate the update on the nTelos timing and the added cost, is there any switch to the CapEx and Earle earlier you mentioned like a $122 million for them, is there any change on that CapEx or timing is any for it back sliding into ’17 then?.

No actually what -- because the delay in the closing nTelos has continued to build and so actually some of the CapEx that we had initially planned that we would have to pay for has been covered by nTelos and that's probably in the $10 million range or so.

And that's making the assumption that we’re going to be able to close here end of March or early April, if the closing gets pushed out further then they will continue to build, the one great thing Ric is that we're not planning on any kind of a slowdown on the upgrade. The transition is going to be smooth and continuous..

And then obviously a lot of moving pieces in the wireless in the industry these days with leasing and EIP and competition, as you step back from it what are your thoughts as far as what the trend lines looks like let’s talk Shenandoah markets not nTelos because that’s got some -- any things on ARPU and churn and take rates of these different type plans?.

Well, I think as far as churn, we have had several quarters in a row now that we have been bumping right at the 1.4 area and I really don't see that there is anything in it that at this point that I see is going to change that. I think churn is going to remain in that 1.4 to 1.5 range.

We have seen -- what has really has shifted is more and more folks going to lease from the installment sales. We've continued to see a relatively solid 25% to 30% of customers who want to stay on the subsidized plans and feel comfortable with that kind of approach.

We did see over the 12 months a fairly significant drop in ARPU, but we had just less than $1 decrease in the -- between the third and fourth quarter and I think that's partly -- we're starting maybe towards seeing some stabilization in pricing as we're kind of getting a better look at what their overall mix is going to look like going forward.

The one thing that we have been doing though is using the enhanced cut your bill in half that Sprint implemented towards the end of 2015, we used every opportunity when the customers came in and we did have increased door traffic as a result of that promotion so it was a positive promotion for us, but as I have stated only 15% of our gross adds actually took it, so we once again focused on our effort to have a consulted sale and even when the customer wanted to take advantage of that promotion we're able to move them up so that they were paying exactly half of what they were paying at AT&T or Verizon, but they're paying more than half and getting maybe a bigger bucket of data and so we think ultimately that customer will be happier, they'll have more data without getting any overages and we got more than half of what they were spending at AT&T and Verizon, so we see that as a positive development for us..

And a lot of the speculation in some industry reports and press about Sprint's network plans, can you update us as far as where you are as far as VoLTE voice over LTE in your network and is there a need to do any kind of changing out or massive network densification in your territory or the nTelos markets?.

Sprint have said that that they will be moving to voice over LTE but that they do need to continue their densification before that's going to be a reality the good news for us is we're already there, but we are not going to launch it prior to Sprint we're going to basically do it with Sprint.

When we look at the nTelos area, there the density of their market is going to look similar to ours once we have finished our upgrades and so if you look at kind of towards the end of 2017 early '18, we should be there in the nTelos footprint and I think that's going to dovetail nicely to kind of where Sprint will be on voice over LTE.

So, I think we're going to be in great shape..

And no plans of doing any kind of change also to your base network or what you're planning to do in nTelos?.

No, really when you look at our -- the fact that we have over 550 sites covering 2 million people we already have a very dense network, we'll continue to look at pockets where we potentially could use small cells, we're continuing to add some capacity sites even though we are getting additional spectrum but we feel very good about where we are as far as overall quality of network..

Thank you. Your next question is from Barry Sine of Drexel Hamilton. Your line is open..

First question on the news that you've disclosed on the nTelos handsets not being able to be migrated over, that seems like a fairly significant change, was there any discussion or potential to renegotiate the terms of the transaction to compensate you for those additional costs?.

Barry it is Earle, no, we have not attempted to renegotiate the transaction, it really was an issue between ourselves and Sprint, in good faith all the parties thought that we were going to be able to migrate those phones but as we got into the details of doing that we realized that it just wasn't going to work and so what we've done is we've pivoted to that how can we minimize the cost to us and minimize the impact on the customer by changing out those phones, so it -- that's the reason why we have I think then being very realistic and saying it is going to take us 18 months or so to do that, we are going to -- we're working on and have a communication is plan when we will have customers make appointments and come in and review their account, put a different phone in their hand, the good news is that a third or more of the phones is simply just changing out the SIM card but it will -- for all Android phones we'll have to put a new phone in their hands..

And can you explain exactly what is it in the phone, it sounds like it's a hardware issue, I mean if it was software you could just renew the software in the phones, in terms of mitigating the cost it sounds like you can give them the same model handset refurbished and then take the old handset back and then sell that to recoup some of the costs is that [Multiple Speakers]?.

And that's exactly what we are going to be doing, we have -- we don't necessary carry all the same phones or Sprint doesn't carry all the same phones that nTelos did, but what we've done is we've gone through the effort of matching up every nTelos phone to a Sprint phone and either on a reconditioned or a new phone.

And then we will be taking up the nTelos phone in as on trade and there will be -- we will be able to recoup some dollars from that, but it is just a different approach, Sprint’s phones don’t work on the nTelos networks, and nTelos phones don't work on the Sprint network as far as not so much the network itself but it's the back office systems.

And a lot of effort was made to see if we could make it work, but it just -- we were pushing rope at that point and decided we just needed to change out the phones..

And then next question, could you give us an update in the past you've talked about Sprint network quality in the joining markets and that's been a bit of an issue, how have they come along, is that still a bit of an issue? And then one way obviously for them to improve their network quality would be to expand Shentel's affiliate footprint maybe you could comment on the potential there?.

Well, the good news is that Sprint is making some great progress as far as upgrading their network. We are seeing the positive impacts of that, not so much, to be perfectly honest in the areas right next to us.

But as you are looking at, at the or using the Washington Baltimore area as an example, the network there is getting better and better and they're pushing out further and further into the suburbs, the upgrade and the densification of that network and that does benefit us.

But there are still areas where we have handoff areas where the coverage is weak on the Sprint side.

And we've been very honest about telling everyone that we have continued to have ongoing discussions with Sprint about those areas and one of the options is certainly to expand our footprint to include some of these outer suburb areas which probably have a much stronger community of interest to us than they do to the metropolitan areas that Sprint’s focused on.

But upgrading and improving the coverage in those areas will benefit both of us. So I guess to kind of a summarize, things are better Barry, there are still some issues that we're addressing. But we're having some very fruitful discussions with Sprint about how to solve that..

And then Earle on Slides 33, you gave a pretty good breakdown of capital spending for 2016, just conceptually beyond that you've talked about a multiyear plan for adding additional cell sites for nTelos, I am assuming 2016 is probably the high watermark and there is also some things you're doing in the Shentel footprint, could you give us any rough directional guidance of what you think CapEx is going to be like in the out years?.

Yes, I think we said that for 2018 finishing up the major push on the -- the major push for finishing the nTelos upgrade in ’17 will be about $90 million. And if we don't have a major fiber bill or acquire another cable company, we believe that the remaining CapEx will be down in the 70 million to 80 million range that we've had the last two years.

So I think when you kind of look at the total, we're kind of looking at $150 million to $160 million for 2017 and then beyond that we will be past the major upgrade and expansion of areas and nTelos area. And then we probably said that it drops to the 120 million range in the 2018 and beyond without a new acquisition..

Okay, and one more question for Adele, tough question, what's the timing on filing the 10-K?.

That would be this afternoon..

[Operator Instructions] The next question is from Hamed Khorsand of BWS Financial. The line is open..

Could you just talk about the operational scale that you achieved in Q4, is that going to be consistent going forward given that roll off in what you're seeing in Wireless right now?.

I think when we look at that the 2016, if you exclude the kind of the nTelos change which will obviously be significant for us, we think that the momentum and the -- that we had in the fourth quarter continues through 2016, there always is the issues of different quarters, there is some seasonality.

But when you kind of look that the total -- in totality 2015 and look in totality 2016, we don't see any significant changes between the two years. We think the momentum will continue..

But what I was specifically relating to because it seems as though you are generating 87 million in revenue provided a lift as far as the scale goes as far as operating margin goes, so moving back to transfer over to 2016 at Q4's rate given that most of the benefit came from your cable TV side?.

Yes, I mean that's a great part of our business is that we have hundreds of thousands of customers that pay us the kind of recurring revenue.

There will be some continued deterioration in ARPU in the Wireless business as we continue to convert more customers to lease and installment sales, but on the Cable side those are pretty solid, that -- the great fourth quarter was driven primarily by broadband and those customers are continuing to buy broadband from us and continuing to buy bigger broadband pipes.

We also continue to have very good growth in voice services, once again a very high margin business for us because of the fact that we own the middle mile and the switch, I already mentioned that we've lost some video customers because we decided to drop the AMC channels, but what's been interesting is that we virtually lost no broadband or voice services as part of this because customers even though had a triple play they did drop the video and went to either or DISH or DIRECTV to keep the walking dead but they kept our broadband and phone product so which is really kind of our objective because those are the high margin business for us and we've been pretty open by saying that if we lose video only customers we are okay with that..

How much longer you think you'll have to endure this ARPU transition in Wireless?.

I only wish I knew, I think my opinion is, is that we are in U and at some point in time when there's stabilization of kind of the way customers want to buy their phones and as customers continue to use more and more data they will be buying bigger data buckets or using overages and so I do think that the average revenue will go back up but I would be hard pressed to predict exactly where the bottom of that U is..

And them so what are you guys assuming as far as the nTelos acquisition goes and the transfer over of those subscribers?.

So from an ARPU standpoint we are basically bringing them all over at their current price plan, so there's not going to be a significant change on day one, but overtime we hope to use the same approach to consultant sales that we use in our own area, try to move customers to price plans that are in their best interest, move them up to a higher data bucket and increase the ARPU there, but we have committed both to the customers and to the FCC that our plan on day one is to migrate them over at their same price plans..

I understand that, but -- and then nTelos also are exposed to all plans and schemes moving away from subsidized phones, so weren't you be exposed to it as well?.

Well -- but they have already been doing that I mean they don't offer a lease but they've been offering the opportunity to buy an installment plan and a significant percentage of their base is already there so there will be some impact, but we don't believe it's going to be dramatically different than ours..

Thank you. There are no further questions at this time. I'd like to turn the call over to management for any closing remarks..

Thank you for participating. I'd like to invite you to let me know if there are additional details you'd like to see us cover in the future. My contact information was provided on the press release..

Again ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect..